This document discusses some of the legal questions that can arise in cloud computing. It notes that while cloud services provide abstraction from infrastructure location and management, geographic location and local laws still apply. When data is processed in the cloud, the duties of the data controller remain even as control of the infrastructure passes to cloud providers. Due diligence is important to understand any potential legal liabilities, as outstanding issues could discourage potential acquisitions or concern their lawyers. While prosecution for legal violations may be unlikely, tort liability remains broadly applicable in cloud computing.

1. Enterprise Ireland eBusiness
Reigning in the Cloud:
Legal questions in cloud
computing
Simon McGarr
Solicitor, McGarr Solicitors

2. Enterprise Ireland eBusiness
A Working Definition of Cloud Computing
• Clouds are hardware based services offering
compute, network and storage capacity
where:
– Hardware management is highly abstracted
from the buyer
– Buyers incur infrastructure costs as variable
OPEX
– Infrastructure capacity is highly elastic
-McKinsey

3. Enterprise Ireland eBusiness
The Metaphor
• Distance
• Ease
• Abstraction

4. Enterprise Ireland eBusiness
The Reality
• Geographic
location
• Local Laws
• Control passes,
but duties remain

5. Enterprise Ireland eBusiness
Compare and Contrast
• McKinsey’s Clearing
the Clouds report
again
• “Characteristic: The
underlying hardware
can be anywhere
geographically”
• EU Directive 95/46
• Processing Data is
“collection, recording,
organization, storage,
adaptation or alteration,
retrieval, consultation,
use, disclosure by
transmission,
dissemination or
otherwise making
available, alignment or
combination, blocking,
erasure or destruction”

6. Enterprise Ireland eBusiness
Interlude
• Data Protection Acts

7. Enterprise Ireland eBusiness
So What?

8. Enterprise Ireland eBusiness
The Perfect Crime?
• Prosecution unlikely
• Tort liability broad
but uncertain
• But..

9. Enterprise Ireland eBusiness
Due Diligence
• Outstanding legal liabilities can put off
potential buyers
• It will really, really put off their lawyers.
• You’ll need something better than saying
you haven’t been prosecuted yet.
• Legal doubt can taint the most enthusiastic
Acquisition.

10. Enterprise Ireland eBusiness
Questions?